The loss since launch in January 2008 compares with a 23.5% average drop for socially responsible funds in the UK-based universe tracked by Morningstar.

Virgin employs asset manager GLG to manage the fund. It charges an annual management fee of 1.75% and will levy 20% for performance, when appropriate.

A Virgin spokesman said: “The performance is disappointing. But we believe you need to take a longer-term investment view.” A spokesman for GLG said performance so far this year had been in line with the index.

The fund draws on the expertise of GLG co-founder Pierre Lagrange, who believes shares in companies with the lowest carbon footprints, on a sector by sector basis, will outperform over time. A year ago, he said: “Our belief is that the environment will be as big as the internet in its impact on companies and consumer behaviour.”

In the second half of last year, however, investors lost interest in green stocks, as saving money became the top priority. Clean energy stocks were battered.

Despite a recovery in the market over the past year, there is little evidence to suggest green stocks are back in favour. The GLG European equity fund, whose picks contribute towards Virgin’s stock selection, based on data from Trucost, has lost 30% since January 2008.

The MSCI global index produced a negative 23% in the period, confirming GLG’s broader European stock selection was poor, despite its good long-term record.

The GLG spokesman confirmed the environmental tilt to the Virgin fund was still failing to reward investors this year, despite keeping up with the index. But he said: “We are confident the strategy will come good.”